Prior to the game, Medusa, the Goddess of Darkness, had been destroying the human's crops and turning them into stone, warranting Palutena, the Goddess of Light, to turn her into an ugly, snake haired monster, and banished her to the Underworld.

Palutena in her 8-bit form

Medusa however took control of the Underworld forces (though it is revealed in Uprising that Hades merely let Medusa 'borrow' his armies) and overrun the Overworld, Skyworld and Palutena's palace.
Medusa turns the Centurian's to stone and imprisons their commander, Pit, in the Underworld. Palutena thankfully however is able to free Pit from his prison and send him a magical bow to escape and rescue her.

The game then follows the character Pit, as he traverses the Underworld, the Overworld, Skyworld, and finally Palutena's overrun palace, collecting the Three Sacred Treasures to defeat Medusa and save Palutena.

The gameplay was said by Nintendo to combine the platforming of the Mario games, the weapon upgrading of the Legend of Zelda games and the shooting of the Metroid games (Nintendo's very well selling franchises), and combining them to make a better game.